Okay, let's try a game of truth-over-assumption:
The company, which began in 1889 making playing cards in the back streets of Kyoto, has been hammered by a precipitous drop-off in sales of its Wii, DS handheld console and its new 3DS version.
The claim seems to be that the 3DS has hit a precipitous drop-off compared to its prior success. Let's take a look at how the Nintendo 3DS, from its inception, has been selling compared to its predecessor, the Nintendo DS.
North American 3DS and DS Shipments - 3DS is selling (to vendors) far better on a launch-aligned basis
Japanese 3DS and DS shipments - 3DS is selling (to vendors) ahead on a launch-aligned basis (ongoing sales indicate that it is also is maintaining this superior momentum)
European 3DS and DS Shipments - 3DS is selling (to vendors) consistently ahead on a launch-aligned basis
Now, they may be saying that the current 3DS activity is not selling as well as the
peak year of the DS. This is most certainly correct, but it is
the normal mode of this industry for sales in each generation to look like a bell curve with a tail on the right. We just passed a transitional period between portable releases, which involves the prior offering dropping off in sales in anticipation of a new offering, and the new offering ramping up as initial production plans are ironed out. This
always happens and should not be considered some new, unusual crash of a business.
There are caveats here:
A) While Nintendo is overall doing
much better in this new portable generation compared to the last one, it is likely that the 3DS will not achieve the heights of the DS, which was in the midst of an unlikely perfect storm. This means that
probably, the 3DS will sell overall a smaller amount. But it is not a crushing drop from the previous generation, as the article would seem to imply. And there has not been much of a causal link established between these dedicated gaming devices and general purpose mobile devices, which have some crossover in market but can also be considered separate industries.
B) I'm using shipment numbers, because that's all that we actually get in terms of accurate totals in all regions. Shipment numbers are sales to vendors, who in turn sell to end users, so sales to end users lag behind these values. When a system is in Beast Mode (such as with the Wii for its first three years and the DS from year 2 to 4), the lag is very small, so shipments are almost equal to sales. Otherwise, they're a bit lower.
C) The above is from garaph.info, a free data-gathering website which is considered particularly trustworthy, but your mileage may vary.
D) I'm thinking of other stuff -- perhaps it's notable that the DS had a higher profit margin than the 3DS, but I don't know that this is really related to the matter at hand.